The Impact of Digital Financial Service Taxes and Mobile Money Taxes on Financial Inclusion and Inclusive Development in Africa

David Mhlanga () and Favourate Y. Mpofu ()
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David Mhlanga: The University of Johannesburg, College of Business and Economics
Favourate Y. Mpofu: The University of Johannesburg, College of Business and Economics

Chapter Chapter 5 in Economic Inclusion in Post-Independence Africa, 2023, pp 81-102 from Springer

Abstract: Abstract Globally, the digital economy is expanding rapidly. The Fourth Industrial Revolution (4IR) and ongoing technological advances are responsible for this enormous increase. The Covid-19 epidemic, which increased dependency on digital services, served as an additional catalyst for the growth of the digital economy. The chapter aimed to conduct a thorough investigation of the digital economy, digital service taxes, and mobile money taxes in Africa to examine the effects of these taxes on tax administration in Africa, the effects of these taxes on financial inclusion in Africa, and the effects of these taxes on inclusive development in Africa. The impact of digital financial services (DFS) taxes on financial inclusion can be examined from four key perspectives, including the increase in the tax burden, changes to how DFS are utilized, alterations in the market’s structure or development, morale, and faith in the tax system. The chapter repeatedly emphasized the detrimental effects that digital service taxes will have on inclusive development, because they may cause resources to be diverted from sectors that benefit low-income earners, such as digital financial services, in favour of those that may not directly benefit them.

Keywords: Africa; Digital financial service tax; Development; Financial inclusion; Mobile money taxesMobile money taxes (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1007/978-3-031-31431-5_5

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